Chinese electric vehicle (EV) stocks dropped sharply in Hong Kong on Monday after BYD Co., the country’s top-selling carmaker, announced large price cuts of up to 35% on 22 of its electric and plug-in hybrid models.
BYD shares fell as much as 8.3%, dragging down peers Li Auto, Great Wall Motor, and Geely by more than 5% amid worries over intensifying competition.
The price reductions, effective until the end of June, include a 20% cut on the Seagull hatchback, now priced at 55,800 yuan ($7,780), and a 34% cut on the Seal dual-motor hybrid sedan, reduced by 53,000 yuan to 102,800 yuan.
These cuts follow earlier discounts BYD made this year and reflect efforts to clear growing dealer inventories that reached 3.5 million cars last month—the highest since December 2023.
The move aims to stimulate sluggish consumer demand amid China’s broader economic slowdown. Despite overall EV sales hitting record highs, growth is slowing, prompting automakers to slash prices to attract buyers.
Morgan Stanley analysts noted the official announcement signals how challenging the market has become.
The price war triggered by BYD’s cuts is expected to push competitors to lower prices further, squeezing already thin profit margins and increasing financial pressure on many carmakers.
Citi Research analysts anticipate rivals like Chongqing Changan and Zhejiang Leapmotor will follow BYD’s lead with their own discounts.
Despite the stock market reaction, BYD’s dealership traffic reportedly surged 30% to 40% following the price cuts, which could boost sales volumes.
The company posted its best sales month of 2025 in April and is on track to meet its full-year target of 5.5 million vehicle deliveries. BYD is also expanding overseas, recently outselling Tesla in Europe for the first time.
In summary, BYD’s aggressive price cuts have rattled Chinese EV stocks and intensified competition in the sector. While the strategy may hurt margins short term, it could help BYD maintain sales growth amid a cooling market.
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